CLUSTER initiatives may be one of the potential options to solve the multiple problems of agriculture, particularly small farmers.

Some countries including Pakistan have experience of cooperatives for safeguarding interests of small farmers. And in India, the cooperative venture of dairy sector named Amul is a successful model which many other Asian counterparts are trying to emulate.

In the same way One Village One Product (OVOP) in Japan and Local Competitive Advantage (LOCA) in Sri Lanka are some other leading case studies. However, many countries are still facing problems of organising their small farmers.

Farmers clusters may be organised either in horizontal or vertical manner. The most important question about the success of this initiative is the start-up organisation of stakeholders on a common platform. Who should come ahead to take up this responsibility? Should it be public or private sector initiative? Now a days, it is argued that the responsibility should be devolved to private sector.

Here we should not forget that the private sector has its own objective which may be little different from the objective of the public sector to ensure welfare and participation of real small farmers.Initially the public sector should be responsible for organising this initiative. This responsibility, once established should be shared by the private sector, eventually all affairs should be handed over to private sector with public sector’s role limited to supervision and monitoring.

What are the most important determinants of cluster initiatives? Earning profit and ensuring welfare of small farmers are the two most important objectives for which three major pre-requisites should be harmonised. These include social, cultural and geographical harmony among the stakeholders.

Pakistan had experienced cooperative movement but it could not achieve the desired results. This was primarily due to absence of harmony in rural areas. Furthermore, political involvement was another impediment in the success of cooperatives.

In this context, aforementioned determinants play important role in bringing together the farmers of similar backgrounds and objectives.

One important step in this direction is the organisation of only those farmers who identify problem which is common in the people of that group. An important step in right direction may be to involve agricultural graduates in this initiative.

The Punjab government has already started a programme of leasing out state land to agricultural graduates. These graduates should be encouraged to develop agricultural services in their areas so that this concept may further be strengthened. If properly handled this may become a revolutionary step in agricultural economy, promoting agribusiness entrepreneurship and establishing agro-based industrial clusters.

Many critical points need to be addressed before taking up challenge of cluster development. The most important of all is the ownership, which must be shared by the legitimate participants, the people with common problems and passion to resolve these problems. This initiative should first be started with public support so that success earned from first venture may be replicated as role model in other areas.

The group then should come up with a preferred joint venture they are going to start to have harmony in their thinking and action. This priority may be crop and livestock raising or some other value-added activities related to agriculture. Furthermore this also may include provision of some services to rural stakeholders.

The success of this venture largely depends upon the level of synchronisation, harmony and confidence among group members. This situation demands for a written legal contract. Membership terms should be very vivid and comprehensive. Members should join this activity voluntarily.

The next component of agreement should be the designation or division of responsibility. Keeping in view the caliber and potential of members, responsibilities should be allocated. Educated people may take up financial matters. As it has been suggested earlier that public sector should contribute a proportion of total finance whereas the lion’s share should be collected by group members.

Collecting collateral from stakeholders is one of the most difficult tasks. So to make such activities transparent and sustainable, individual financial responsibilities should be clear and well stated in the agreement. In the same context, cost sharing formula should also be a component of this agreement.

An important issue in management of such group activity is the reward and punishment system for improving working mechanism. The farmers who are producing good quality should be rewarded little higher than others. This incremental reward system should be well stated in agreement so that no member should have any objection on this. At the same time, punishment system should also be designed with the consent and participation of members. This may help in keep the system intact.

Such initiatives should be designed to engage participants in a well coordinated manner. With experience and capital gain, this group action should introduce vertical integration and value addition. Following real spirit of cluster initiatives, this may start with simple things but may end up in modern and sophisticated agro industry.

The success of this system demands real spirit and the sense of togetherness, at the start with supervision and support from public sector. This practice may turn farmers into entrepreneurs because they have characteristics which may enable them to enjoy benefits of niche market that exists in many developing countries.

Small farmers are ready to serve the market even on Sunday and there are many buyers like restaurants who need supplies of fresh fruits and vegetables every day. As such, acknowledging the potential of rural households, cluster initiatives need to be taken so that legitimate right and share of small farmers can be ensured and delivered.